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What is the Terra Ecosystem?

21.02.2022

Coinmetro is a people-centric exchange platform, and Terra, a people-centric blockchain. Its ultimate goal is mass adoption of crypto. Just like Coinmetro, the Terra Ecosystem and its team focus on end-users in everything they do.

Let’s find out in more detail what the blooming Terra Ecosystem is about and explore its potential.

 

What is Terra?

Founded by Terraform Labs, Terra is a unique open-source public blockchain protocol that is able to deploy a suite of algorithmic stablecoins on its network.

It is a Proof-of-Stake blockchain utilizing the Cosmos technology.

The efficient combination of open-market arbitrage incentives and decentralized Oracle voting ensures that all crypto assets created via the Terra Protocol consistently track the price of any fiat currency. As a result, Terra users can trade, exchange, spend, or save the protocol’s stablecoins instantly on the Terra blockchain.

 

Brief Background on Terraform Lab

Terraform Labs is a Korean company led by Daniel Shin and Do Kwon. It raised over $150 million from such top-tier investors as Pantera Capital, Parafi Capital, Delphi Digital, Hashed, and others.

Before successfully bringing decentralized finance (DeFi) to the masses, Terra specialized in crypto payment services. However, it was Terra’s selection of crypto assets pegged to different fiats that attracted the majority of the blockchain’s users and helped Terra excel in the DeFi scene.

 

What is Terra’s Aim?

The Terra Ecosystem is ambitious and clearly aims at efficiently accelerating mass adoption of crypto by:

  • Developing payment apps;
  • Merging traditional finance and DeFi. For instance, the Mirror Protocol provides easy access to the stock market via mAssets, which mirror certain stocks. Put differently, mAssets mimic the behavior of real-world assets.
  • Partnering with the biggest players in many industries to drive the adoption of Terra stablecoins.

 

The Main Feature of the Terra Protocol

As mentioned previously, stablecoins created on Terra can consistently track the price of an underlying currency. Thus, Terra crypto assets can be used like fiat currencies but come with the features characteristic of blockchain, such as – but not limited to – near-instant transactions, lower fees, and public ledgers.

It’s important to note that stablecoins are valuable as long as they maintain their price peg. With that in mind, Terra relies on the basic market forces – supply and demand – to maintain the UST price.

To explain: when the demand for Terra is high and the supply is limited, the price of Terra increases, and vice versa. The protocol ensures the supply and demand of Terra always remains in balance. Why? Balance leads to a stable price.

The Terra Protocol is known for its scalability, which ensures Terra’s price stability, regardless of market conditions, such as volatility or demand. To explain further, Terra’s scalability has been achieved by means of encoding the monetary policies into the protocol to make it resilient and durable.

 

UST and LUNA Tokens

Terra (UST) and LUNA are the Terra Protocol’s two main tokens.

UST: Stablecoins that track the price of fiat currencies and have the names of their fiat counterparts. Users mint new UST tokens by burning LUNA.

LUNA: The protocol’s native staking token that absorbs the price volatility of UST.

LUNA helps to govern the ecosystem. Moreover, it exists to drive mining. Terra users stake LUNA to validators (i.e., Terra blockchain miners) who, in turn, record and verify transactions on Terra and are rewarded from transaction fees. Validators are an integral part of the Terra blockchain as they ensure its accuracy.

Last but not least, the more active the usage of UST, the higher the value of LUNA.

 

dApps on Terra

There are currently 150 dApps on Terra.

Currently, the largest protocols are Anchor (Lending), Lido (Liquid Staking), Mirror (Synthetic), and decentralized exchanges like Astroport (AMM) and Terraswap (AMM).

 

Coinmetro Now Supports Native Terra

Coinmetro has officially welcomed the Terra Ecosystem. You can easily buy UST on our exchange and participate in dApps or the Anchor Protocol to make 20% APY! In addition, our exchange features the LUNA/USD and LUNA/EUR pairs.

Our fiat on-ramps will enable the purchase of Terra assets with fiat and withdrawal on the Terra Chain.

We look forward to working even more closely with the Terra team. Most importantly, we love to see a connection between our platforms and evolving the synergy to make the ecosystem even more inclusive and accessible.

Ready to start trading? Sign up now or head over to the exchange!